Air Force investigating disputed plane contract

The U.S. Air Force said Tuesday it plans to rescind a disputed $354 million contract for a light air support plane and open an investigation into the award, saying it was not satisfied with documentation supporting the decision.

Wichita-based Hawker Beechcraft Corp. had challenged the award, claiming its own AT-6 aircraft was wrongly excluded from the selection process. Nevada-based Sierra Nevada Corp. was given the contract Dec. 22 and was to work with Brazil-based Embraer, which makes the Super Tucano airplane.

At stake is which company will build the light air-support aircraft, a single-engine turboprop supporting security efforts in Afghanistan. The contract ultimately could be worth nearly $1 billion, depending on future orders.

Hawker Beechcraft sued after the government dismissed its protest over being blocked from the contract. The Air Force last month halted work on the contract, but said at the time it was confident of the merits of its decision.

On Tuesday, the Air Force said it advised the Department of Justice that it will take corrective action and set aside the contract to Sierra Nevada effective March 2.

Citing the ongoing litigation, Secretary of the Air Force Michael B. Donley would only say that David Van Buren, the Air Force's senior acquisition executive, is not satisfied with the documentation supporting the award decision.

"While we pursue perfection, we sometimes fall short, and when we do we will take corrective action," Donley said in an emailed statement.

Gen. Donald Hoffman, commander of the Air Force Material Command, has initiated an investigation into the matter, the Air Force said.

Hawker Beechcraft said in a statement that it had received notice Tuesday from the Air Force that the company will be reinstated to the competition.

"We commend the Air Force for this decision and we believe strongly it is the right thing for the Air Force, the taxpayers and the people of Hawker Beechcraft," Hawker Beechcraft chairman Bill Boisture said. "We look forward to competing for this contract as this important initiative moves forward."

Taco Gilbert, vice president of business development at Sierra Nevada, said in a phone interview that the Air Force's decision was a "big disappointment" because the company was confident it had a superior product that met or exceeded all requirements. He said the company was eager to start producing aircraft to meet combat requirements for Afghanistan and support the redeployment of U.S. troops next year.

"We know it is important to start creating jobs in America, particularly given the situation that we find ourselves in," Gilbert said. "And again we were anxious to start hiring Americans for our production line down in Florida."

Sierra Nevada has said its work on the contract would support more than 1,200 U.S supplier jobs, including at least 50 new high-tech and engineering positions at its Jacksonville, Fla., facility. Hawker Beechcraft said had it won the contract, the work would have supported 1,400 U.S. manufacturing jobs, including 800 at the company's facility in Wichita.

U.S. Rep. Mike Pompeo, whose district includes the Hawker Beechcraft headquarters, said in a teleconference that the Air Force had excluded Hawker from the competition just days before the bidding, leaving a single company eligible to bid. For the Air Force to set aside the contract that had been awarded was "no small undertaking."

"The Air Force does not do that lightly," Pompeo said. "It is very unusual absent a supplier not performing, which is clearly not the case here. This is highly unusual, which suggests that there is going to be a very broad re-look of the entire process."